FPIs turn net buyers, pump ₹22,600cr into Indian equities
What's the story
Foreign Portfolio Investors (FPIs) have made a strong comeback in the Indian stock market, turning net buyers in February after three months of continuous outflows. The inflow for the month stood at ₹22,615 crore, marking the highest monthly investment by FPIs in 16 months. The last time FPIs had invested this much was back in September 2024 when they had pumped ₹57,724 crore into Indian equities.
Market trends
FPI outflows in previous months
The February inflows come after a series of major net FPI outflows. In January 2026, FPIs had pulled out ₹35,962 crore from Indian equities. This was preceded by outflows of ₹22,611 crore in December 2025 and ₹3,765 crore in November 2025. Despite the return of foreign investments this month, the performance of the Indian stock market remained subdued with Sensex falling over 1% and Nifty slipping by 0.5%.
Market analysis
Corporate earnings momentum attracting FPIs
Market experts attribute the renewed FPI interest to improving corporate earnings momentum. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said that Q3FY26 results show a clear pick up in corporate earnings with a 14.7% growth. He expects this trend to continue for the rest of FY26 and estimates an earnings growth of around 15% for FY27.
Market volatility
Global factors affecting Indian market
Investor sentiment remained fragile amid rising geopolitical tensions between the US and Iran, which rattled global markets and prompted cautious positioning. Additionally, recent artificial intelligence-related developments from Anthropic triggered a sharp selloff in domestic IT stocks. This was due to investors reassessing competitive dynamics and near-term earnings visibility in the technology sector.
Sectoral divergence
Sectoral flows during February
Sectoral flows showed a major divergence during February. FPIs were heavy sellers in IT stocks, offloading shares worth ₹10,956 crore in the first half of the month alone. However, they were net buyers in financial services and capital goods stocks. Ajit Mishra from Religare Broking said market sentiment remained fragile as investors reacted to rising global uncertainties including ongoing conflict developments in the region and renewed tariff-related rhetoric from the US.
Investment strategy
What should investors do?
Going forward, the Indian stock market is likely to remain volatile amid rising tensions in the Middle East. Ajit Mishra recommends a cautious and selective investment approach focusing on fundamentally strong large-cap companies and sectors with relatively stable earnings visibility such as banking, healthcare, metals, pharma and energy. He also advises traders to maintain disciplined risk management practices while avoiding aggressive leverage until clearer signs of stability emerge before increasing exposure.